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SSA Governors Prepare for Fast Ferry Decision on Runs to New Bedford

After months of uneven discussion about whether to open up high-speed ferry service between New Bedford and the Vineyard, the Steamship Authority is now set for a crucial vote on a pilot project that will cost the boat line millions of dollars over the next three years, if it is approved.

SSA acting general manager Wayne Lamson said this week that negotiations were still under way with the owners of a high-speed passenger ferry for a lease arrangement. Mr. Lamson said no numbers were final, but he said he expected to bring a proposal to the October board meeting next Thursday morning in Woods Hole.

It is understood that Boston Harbor Cruises has offered to lease a high-speed passenger ferry to the boat line for $1.2 million a year, providing that the SSA commits to a three-year lease with an option to buy the boat at the end of three years. If the trial project is approved, the high-speed ferry will be used only in the summer and will replace the passenger ferry Schamonchi, which the boat line bought for $1.7 million early this year.

It is unclear what would happen to the Schamonchi if the three-year trial project is approved.

Little has been done in the way of analysis or market study for the high-speed project.

A hasty and unscientific passenger survey was conducted on boat line ferries over two weekends at the end of August, and former general manager Armand Tiberio dashed off a feasibility study for the project just before he left the SSA in early September.

The study included no information on costs, but centered mainly on the availability of vessels for charter. One report included in the study found that in order to break even, the high-speed ferry would need to bring an additional 200,000 passengers to the Island every summer.

Vineyard SSA governor J.B. Riggs Parker is pushing hard for the high-speed ferry project. He is also pushing hard for an endorsement of the project from the All-Island Selectmen's Association. The association will meet in special session Wednesday night to hear a report from Mr. Parker on the trial high-speed ferry project.

On the Vineyard, public opinion about high-speed ferry service is mixed at best, and a somewhat ragged collection of facts about the issue has been shrouded in a high-pressure propaganda campaign waged for months by Mr. Parker, Mr. Tiberio and New Bedford city solicitor George Leontire.

Meanwhile, this week a recent vote by the SSA board of governors on a complicated cost allocation policy was transformed into a political battering ram of sorts. Encouraged by Mr. Parker, Island officials registered their objection to the 2-1 decision by the SSA governors to adopt a modified cost allocation policy. The modified policy replaces a policy adopted by the boat line board three years ago.

Under the old policy the board had agreed to "recapture" some $7 million in revenues for the Vineyard from a period when the revenues from the Nantucket route did not cover the cost of service. The revenue recapture was supposed to take place whenever there is a rate increase.

The policy became a bone of contention between Nantucket and the Vineyard, with Mr. Parker rigidly backing the old policy, even though Mr. Lamson, who is the boat line's longtime treasurer, recommended that the policy be adjusted.

The All-Island Selectmen's Association this week sent letters to both the Falmouth selectmen and the Nantucket selectmen urging them to ask their SSA board members to reconsider the vote on the cost allocation policy.

Yesterday former Vineyard boat line governor Ronald H. Rappaport, who was the architect of the policy, reacted to the flap.

"This was never intended to be a wedge issue to pit the two Islands against each other, and I think it is incumbent on the two Island members to find a solution," he said.

Mr. Rappaport explained the genesis of the policy.

"Historically it's been the policy of the Steamship Authority that each route is supposed to pay for itself, and in 1998 we learned that for 1997 projected through 1998 and even into 1999 - that the fares that Nantucket was paying weren't covering its expense by a considerable amount. I didn't want that to be lost to institutional memory, and I asked the treasurer to come up with a policy whereby those overpayments could be recaptured. The treasurer came up with a policy and it was unanimously voted without dissent - this was not a wedge issue and it didn't put one Island against another and there was general acknowledgement that there was a situation that needed to be rectified."

Mr. Rappaport said the policy has functioned for three years to keep rate increases on the Vineyard run to a minimum.

"For the last three years, Nantucket has had about $5 million in rate increases while the Vineyard has had about $700,000 in increases. The policy has resulted in each route paying for itself and it has caused a sort of sharper institutional focus. I also know that both Armand Tiberio and Wayne Lamson thought that to apply the recapture policy this year would be punitive to Nantucket," Mr. Rappaport said.

Mr. Lamson said it is important to understand the policy in its context. "I think we need to look at this adjustment in terms of total revenues over a 10-year period of time, which is some $488 million," he said.

Mr. Rappaport said he is in no position to judge the modified policy, but he said the current public focus on an internal accounting issue is misplaced.

"This is really an accounting adjustment, and I think it is unfortunate that this is diverting the attention of the public when we have much larger issues to focus on, such as Steamship Authority fast-ferry service to New Bedford - which I don't support," he said.

The boat line meeting next Thursday begins at 9:30 a.m. in the Candle Room of the Marine Biological Laboratory in Woods Hole.

As usual the agenda for the meeting promises to be long with a number of other key issues expected to come up for a decision.

Boat line governors will decide whether to continue using a private carrier on the freight run between New Bedford and the Vineyard or to have the SSA run the service itself.

A request for proposals (RFP) from private carriers netted one bid this week from Seabulk Marine Inc., the company that has operated a pilot freight program for the last two years.

Also next week, SSA governors are expected to vote on an operating budget for the coming year and to take action on a proposed fare increase for both the Vineyard and the Nantucket runs.

If it is approved, more than half of the fare increase will come out of the pockets of year-round residents in the form of increases in excursion fares for year-round residents.

Mr. Parker reportedly plans to ask for even higher fare increases than what has been proposed by management in order to put more money into the boat line replacement fund this year.

The replacement fund is one of several special-purpose funds allowed by statute. The replacement fund functions as a depreciation account; under a long-standing SSA policy, transfers to the replacement fund are limited to the amount of depreciation from the previous year.

Replacement fund transfers have gone up and down in the last 10 years according to the amount of revenue surplus.